Lawyers for the railroad will ask a Quebec bankruptcy judge
to “put a charge” on the assets of the company’s Canadian
unit, “which would in effect reserve some of the results of an
asset sale for people that would be creditors under the
deductible amount of an insurance claim,” Burkhardt said today
in a telephone interview.

The Canadian Transportation Agency on Aug. 16 conditionally
agreed to extend Montreal, Maine & Atlantic’s so-called
certificate of fitness to Oct. 1, provided the railroad gets
enough funds to pay for the self-insured portion of its
insurance coverage. Regulators on Aug. 13 ruled the railroad
would stop operating as of Aug. 20 because it lacked sufficient
liability coverage in the wake of the disaster in Lac-Megantic.

Burkhardt said he would shut down the railroad “rather
quickly” if the judge denies the company’s request to keep
operating. Gaining approval will give Montreal, Maine & Atlantic
time to make alternative arrangements, he said.

“I am hoping that he will approve of that,” Burkhardt
said. “I think he will, but I am not sure because he is a
judge.”

Bankruptcy Filing

Montreal, Maine & Atlantic filed for bankruptcy protection
in Canada and the U.S. Aug. 7 because of potential liability
from the accident, Canada’s worst rail disaster since 1910. A
criminal probe by Quebec authorities is under way, the town of
Lac-Megantic is seeking financial aid to restore the gutted
community and a civil complaint alleges a failure to take steps
to prevent the derailment.

Revenue has plummeted to about $1 million a month from $3
million before the catastrophe, Chief Financial officer Donald
Gardner said Aug. 6 in an affidavit that was part of the
company’s U.S. bankruptcy filing.

Montreal, Maine & Atlantic now has about 65 employees,
Burkhardt said. That’s down from the 179 that the company had at
the time the crash.